Recently, former Paramount head Barry Diller suggested that movie moguls—and Hollywood’s highest paid actors—take 25% pay cuts. The goodwill gesture, by Diller’s reasoning, just might help bridge the gap between the striking writers and actors and the big studios and streamers. When I first heard Diller’s proposal I thought, It’s déjà vu all over again. Few remember that in 1933, the studios actually joined together to mandate that administrators and creators making over $50 a week take a 50% pay cut.

It didn’t work then and it probably won’t work now.

There are many reasons the move failed 90 years ago. But the bottom-line difference was that in 1933 writers and actors were not yet unionized. And in retrospect, it is clear that the studios, by imposing those steep cuts, made the writers—followed by the actors and directors—realize that their contracts were worthless without unions. (Screenwriters formed a guild that April; actors did so in July.)

Yes, there were already cinema organizations aplenty. For years, writers had belonged to clubs and associations. In 1922, a consortium of film companies had created the Motion Picture Producers and Distributors Association (MPPDA), otherwise known as the Hays Office, to lobby for the industry’s interests and to try and minimize censorship. Then, five years later, the Academy of Motion Pictures Arts and Sciences (AMPAS) was formed, in large part to prevent the unionization of the still-burgeoning, if silent, film business. Brought together under one umbrella, the Academy’s five branches—writers, actors, directors, producers, and technicians—served to speed along the process of making sound pictures. (There are 18 branches today.) But by early 1933, a perfect financial storm had swept across Southern California, one that threatened the industry that, along with agriculture, tourism, and oil, was the backbone of the Los Angeles economy.

The Depression, which began in 1929, had circled the globe and hit Hollywood with a wallop. President Franklin D. Roosevelt was inaugurated in early March of 1933 and closed the country’s banks for a week to get a handle on the economy. Suddenly, fewer and fewer Americans had cash for necessities, let alone movies. (By 1933, audience numbers had dropped to 60 million a week—from a sky-high 110 million in 1929.)

Filmmaking was a cash-on-the-barrelhead business, so studios turned to Wall Street for financing, eventually welcoming new moneymen and risk-takers who really hadn’t a clue about the movies. It got to the point that by the end of the year, there was not one person on the board of Paramount Pictures with previous experience making films.

It was the MPPDA, after all, that had come up with the idea to push the salary cut. And Warner Bros., Paramount, and Columbia complied: All three were among the studios that, on March 9, 1933, instituted wage reductions. At the time, MGM alone was operating in the black, thanks in large part to the success of the popular comedies of Canadian actor Marie Dressler. But MGM’s boss, Louis B. Mayer, apparently, only had enough money on hand to cover his staffers’ salaries for a Couple of weeks.

As MGM story editor Samuel Marx later wrote in his book Mayer and Thalberg: The Make-Believe Saints, Mayer, with his beard “stubbled and his eyes red,” entered the largest auditorium on the lot at a pivotal moment in March to address his assembled employees. Mayer promised to keep the salary reductions short-lived and, if necessary, to repay them all out of his own pocket. He feigned tears. His voice caught. Lionel Barrymore and others cheered him on, expressing their support. When Mayer left the room, feeling triumphant, Marx heard him ask the casting chief, Benny Thau, “How did I do?” (Mayer’s crocodile tears moment was recreated in a scene in David Fincher’s 2020 feature, Mank, about the tortured birth of Citizen Kane.)

Word of Mayer’s cynical comments soon spread. And the film community got mightily riled. They held meetings. They looked to other industries across America in which organized labor was becoming a vital force. In short order, the screenwriter Albert Hackett would credit Mayer with creating, in one fell swoop, “more communists than Karl Marx.” And one long, hard look at their “contracts” proved to the writers, directors, and actors that those pieces of paper offered them no protection. Their only option was to unionize.

On March 28, 1933, movie scribes Anita Loos, Frances Marion, Jane Murfin, and Bess Meredyth were among the 100 women and men who gathered to sign $100 membership checks made out to the Screen Writers Guild (SWG). A week later, on April 6, those 100, along with scores of compatriots who joined their ranks “by invitation or application,” comprised the newly formed SWG. John Howard Lawson, who had few film credits to his name (but who, 14 years later, would become one of the blacklisted Hollywood 10, was elected the guild’s first president. Frances Marion, the town’s highest paid screenwriter, male or female—and one of its most prolific—was named vice president; producer-screenwriter Ralph Block, treasurer; and Joe Mankiewicz, still in his early 20s, secretary. (When his older brother, Herman, was asked why he didn’t support the guild, he claimed, with his cynical wit, “All the $250-a-week writers I know are making $2,500 a week.”)

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